The Centers for Medicare and Medicaid Services (CMS) announced this weekend that they will freeze their Obamacare insurance bailout payments after a court case that ruled that the payments were based on flawed rules.
The Trump administration froze Obamacare insurance bailout payments, also known as the cost-sharing reduction program (CSR), pending appeal in the federal districts courts. The federal government planned to spend roughly $10.4 billion to insurance companies to shore up the catastrophic, small group, and individual health insurance markets.
CMS Administrator Seema Verma said in a statement:
We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.
Sens. Ted Cruz (R-TX), Mike Lee (R-UT), as well as Reps. Mark Meadows (R-NC) and Jim Jordan (R-OH) wrote about why they believe the CSR program amounts to a bailout of Obamacare.
The conservative lawmakers wrote:
Before now, Republicans correctly saw CSR payments for what they were – flagrant bailouts of favored Obamacare insurance companies – and refused to be complicit in that bailout.
Republicans also recognized that CSR payments lacked sufficient pro-life protections, allowing taxpayer funding for abortions. These problems with CSR payments still remain – but the attitude among some Republicans has strangely and suddenly changed.
The reinsurance program proposals under consideration today would create a new backdoor bailout similar to one originally found in Obamacare.
America’s Health Insurance Plans (AHIP) said that the move would create “new market disruption,” which would drive up health insurance premiums.
Andy Slavitt, the head of CMS under President Obama, tweeted, “The administration should react and address quickly so as not to precipitate a crisis.”
New CMS data released in June, before Trump froze the CSR payments, revealed that average Obamacare monthly premiums spiked by 27 percent in 2018.
Meanwhile, President Donald Trump has taken executive action to offer Americans more affordable health options compared to Obamacare.
The Trump administration released a new rule in June that expanded Association Health Plans (AHPs), which allows for small businesses and industries to band together and offer their employees cheaper health options compared to Obamacare.
An Avalere Health study revealed that AHPs would be roughly $2,900 lower per year compared to the small-group market and $9,700 lower per year compared to the individual market.
Sen. Rand Paul (R-KY) lauded Trump’s new healthcare rule as the “biggest free-market health care reform in a generation.”